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Fiat Chrysler Commits to $9 Billion US Investment in UAW Deal

Dec. 2, 2019
Fiat Chrysler agreed not to close any assembly plants during the life of the contract, and to invest in its Belvidere, Illinois Jeep Cherokee factory.

Fiat Chrysler Automobiles NV clinched a new tentative labor contract with the United Auto Workers by agreeing to double up on a major investment in U.S. production announced earlier this year.

The Italian-American carmaker, which said in February it would spend $4.5 billion to boost output of Jeep sport utility vehicles and Ram trucks, will invest another $4.5 billion over the course of the next four years, Cindy Estrada, a UAW vice president and head of the union’s Fiat Chrysler department, said in a statement. The company will add 7,900 jobs during that span, according to the union.

Fiat Chrysler made the spending and job commitments to the union in the midst of negotiating a merger with Peugeot maker PSA Group. The companies have won over the French state in part by assuring that they can generate synergies without closing any plants. Adding production capacity amid a global slowdown in vehicle sales could be a risky gambit for the combined carmaker.

In a statement, Fiat Chrysler confirmed it had reached a deal with the UAW and said further details will be provided later. The union said its national council will meet Dec. 4 to review the tentative agreement and decide whether hourly and salary members should start voting on ratification beginning Dec. 6.

The UAW and Fiat Chrysler were close to reaching a deal that included $9,000 signing bonuses, people familiar with the negotiations said on Friday, matching what Ford Motor Co. recently agreed to pay senior workers. The union secured $11,000 ratification bonuses from General Motors Co. following a 40-day strike that ended last month.

Fiat Chrysler agreed not to close assembly plants during the life of the contract and to invest in its factory in Belvidere, Illinois, that makes Jeep Cherokee SUVs and employs almost 3,700 hourly workers, people familiar with the talks said earlier. The fate of the facility had been a subject of speculation because the company eliminated a third shift there earlier this year, dismissing more than 1,300 workers.outtt

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